This project was conducted as a joint venture between FIATECH and CII, aimed at identifying the impact that changes in equipment, material, and information technologies have had on construction productivity. To support this purpose, the project adapted existing tools and developed a metric to quantify the type and level of technology usage. Since a multitude of factors simultaneously impact a project's productivity, including work force characteristics and management practices, it is difficult to isolate technology's impact on productivity. Therefore, the project utilized an activity-based analysis in order to control for the number of factors that influence productivity at the project level. Correlating changes in technology, with changes in productivity through statistical analysis, allowed the project team to identify the order of magnitude that different technological characteristics have had on construction productivity, which formed the foundation for a model to assist future planning and implementation of new technologies. The model was validated and expanded through field testing of a material tracking system.

Deliverable

Business Case

Arguably, construction under utilizes technological advancements at its disposal. The relative lack of technology utilization in construction supports the belief that construction productivity has been declining since the 1960s. Studies using governmental industry data indicated that construction's labor productivity declined from 1964 to 2000 at an annual compound rate of -0.72%. Clearly however, the opportunity to improve construction productivity exists, and there is evidence that sectors of the construction industry have experienced long term productivity growth. The ICP research team has examined productivity trends using microeconomic data for 300 activities. The comprehensive results indicate widespread improvement in construction productivity across multiple construction divisions ranging from 0.2% to 2.8% per year between 1976 and 2004. Furthermore, their research found that many of the productivity improvements at the micro level were related to changes in equipment and material technology. The team is also very familiar with studies on Fully Integrated Automated Project Processes (FIAPP) conducted in 1998-2001 by the Sloan Center for Construction Industry Studies (J.T. O'Connor) and the Construction Industry Institute, which highlighted the relatively low level of integrated and automated technology usage in construction and the impact of usage on project performance.

Economic research has shown that technology tends to have a greater impact on labor productivity versus factor productivity measures. For example, investment in new equipment technology may improve a company's labor productivity, but their factor productivity may actually decline if the relative increase in the cost of the equipment outweighs the relative savings in labor costs and gains in output. While there is evidence that improvement in equipment and material technology do have a positive impact on construction productivity, the impact of information technology remains largely uncertain. Although information technology clearly has the capability to improve construction productivity through improved communication, logistics, planning, and resource allocation, exactly how it improves construction productivity is not well understood. CII's FIAPP and FIATECH's efforts, as well as a recent major NIST study, indicate that much potential is to be gained via interoperability alone. As well, there tends to be a required critical mass in terms of adoption before a new technology impacts production. Although electricity was first introduced in the 1880s, it was not until around 1920 that the nation's productivity demonstrated noticeable improvement when the majority of U.S. industrial machinery became electrically powered. It is arguable that the North American construction industry has not reached the critical threshold with regard to widespread implementation and integration of information technology. Certainly, one aspect that helps improve the impact of any new technology, including information technology, are innovations that decrease the investment and maintenance costs along with a comprehensive understanding of how the technology can be most effectively utilized to improve productivity.

There is significant value to be gained for the construction industry if technology could be more effectively leveraged to improve construction productivity. Changes in technology have had a profound effect on productivity in other industries and have prompted industry strategies intended to further promote productivity by leveraging technology usage. Understanding how past technologies have improved construction productivity and demonstrating how new technologies can do the same will help FIATECH and CII member companies identify emerging technologies with the potentially highest rates of return.

Resources

Publications

Test Projects Show Great Potential for Tracking Technology, Tom Sawyer, ENR